Extraterritorial Reach of Minneapolis Sick Time Ordinance Rejected, Yet Again

When we last left the Minneapolis PSL law, the Minnesota Court of Appeals had affirmed a district court decision temporarily enjoining Minneapolis from enforcing its Sick and Safe Time Ordinance against businesses outside the City limits.  The Supreme Court of Minnesota in December 2017 declined to review the Court of Appeals’ decision, which left the appeals decision in place.  The Ordinance went into effect on July 1, 2017 with regard to businesses within the City limits only.

Since those decisions dealt only with the request for a temporary injunction, the case continued on the plaintiff’s further request that the Minneapolis PSL law be permanently enjoined because it was preempted by state law and because its purported application to businesses outside the City whose employees work within the City exceeded the City’s legislative authority.

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To attempt to address the territorial issue, in March 2018, the City amended its ordinance in two respects. Under the Ordinance, an employee who works in Minneapolis at least 80 hours per year is entitled to accrue PSL time. The amendments added that employees accrue PSL time for hours worked “within the geographic boundaries of the city” and could use that time only when scheduled to work “within the geographic boundaries of the city.” Continue reading

The Extraordinary Extraterritorial Reach of Paid Sick Leave Laws

The Hennepin County judge’s decision last week to enjoin enforcement of the Minneapolis Sick and Safe Time Ordinance against any employer outside the City’s geographic boundaries, i.e., an extraterritorial employer, prompts some further reflection. Just how does a PSL Ordinance give a political subdivision the right to grant PSL benefits to extraterritorial employees and impose obligations on extraterritorial employers?

It starts with the definitions of “employer” and “employee.” For example, the Minneapolis SST definition of “employer” does not include any geographic limitation. An “employee” is someone who works 80 hours a year in Minneapolis.  Put these two definitions together and the Ordinance requires an extraterritorial employer to comply with the Ordinance with regard to any employees it sends into Minneapolis for 80 hours a year.  The judge noted that plaintiffs in the litigation include some with employees who come from places “as far away as China” and work at least 80 hours annually in Minneapolis.globe-1339833_640

It seems impossible for any political subdivision to believe it has the right to dictate the PSL benefit for extraterritorial employees. Whenever I reach “impossible” in my analysis, I remind myself of the White Queen’s retort to Alice, in Alice in Wonderland, about believing the impossible: “Why, sometimes I’ve believed as many as six impossible things before breakfast,” she said. I suspect Minneapolis merely copied this extraterritorial concept from the long list of other PSL laws that have it.

The concept raises some questions.  Does the extraterritorial employee accrue PSL only while working in the PSL jurisdiction or everywhere that employee works? Can the extraterritorial employee use accrued PSL when working or scheduled to work somewhere other than the PSL jurisdiction? San Francisco and New York clarify that employees accrue PSL only for hours worked within the respective jurisdiction and can use that time only when scheduled to work in San Francisco or New York, as the case may be. Other PSL’s are silent on these issues. Continue reading